How do know, you understand Digital Transformation?

Dusting off this article that I published in 2018 and seeing the rage Digital Transformation is getting, I decided to re-edit it, confirming some concepts, thanks to the course I am currently taking at the University of Virginia.

I hear the term ¨Digital Transformation¨ at least 10 times a day. The same thing happened with "cloud computing", "Big Data" and "E-commerce". Today, in technological fads, Digital Transformation (DT) "is the new black."

So now companies proclaim themselves as standard-bearers of Digital Transformation, even though their main business was completely different years ago, and they flock resumes and LinkedIn profiles that say, "Promoting the Digital Transformation of companies."

As usual, any such accelerated dispersion of a fashion brings with it a series of myths. The more popular the concept becomes, the more it lends itself to confusion, overselling, and underestimation. More people presume to understand what it is when they really have no idea or have a partial idea.

One of the frequent biases is to think that "change" is "transformation". Although one thing leads to the other, change is "rearranging the apartment furniture", transformation is "moving upstairs ..." The perspective also determines whether its about change or transformation. A large company that professes to embrace Digital Transformation because its meetings during the pandemic are via Zoom is clearly because it has absolutely no idea what Digital Transformation is. However, a small company that now takes its requests vía WhatsApp chats could be transforming its business in a very simple way...

So, what is Digital Transformation then? I would just like to warn you – seeing as how DT is a "technological religion", there will never be consensus on what it really is and although many respectable sources have different concepts, everything they say is more or less complementary or the same.

The definition is so extensive that I have to break it up into pieces:

1. Digital Transformation is making money in new ways: "Creating new business models leveraged over the digital economy" is a fancy way of saying it. A simple example is putting chips on tennis shoes to record information on how they are used and then selling that information to make new products.
2. Digital Transformation is changing the Customer Experience: "Re-designing the customer journey". A store uses technology so that customers can measure dark glasses digitally and make more agile and satisfactory purchase decisions. Changes in operating processes that are not necessarily externally visible to customers but that dramatically change the value chain also count in this category.
3. Digital Transformation is transforming culture and people: There are no euphemisms here. A company full of people who do not know that the world is changing, who do not want to change or who cannot change because... simply will not experience a digital transformation but the digital transformation will certainly pass it by. See below, how a group of accountants put together a course on Robotic Process Automation. Also take a look at the course from University of Monterrey - on how to use Agile methodologies in a business environment. I call that a cultural change!
4. Digital Transformation is acquiring "new" technological capabilities: The most popular of the 4 components of the definition. It is true that without technology there is no TD, but to think that TD is only technology is an epidemic spread by "the hammers that see everything as nails" (Kodak invented the digital camera but never had the other 3 components of the transformation). Once this bias is overcome, technology is put at the service of the other 3 pillars, and magic occurs.

Executive Summary

Digital Transformation is making money in new ways with "new" technologies, making customers live new experiences thanks to a change in culture of the people who work in the companies.

Note that the word "new" is in quotation marks because the technologies that drive Digital Transformation are not really new, but rather that it is time for them to enter the global stage after years and even decades maturing in more anonymous environments than the mass, such as the academy.

Next steps

Digital changes dramatically quickly, so you need to stay up to date. Below is an excerpt from my personal selection of Coursera programs for such purposes:

Learning Resource	Description
Certificate in Digital Transformation Boston Consulting Group University of Virginia	The best Digital Transformation course I have found to date: The factors underlying disruption, innovation and technology. How to use the Boston Consulting Group's digital transformation model as a guide to digitizing your organization. The pros and cons of the present technologies that drive maturity.
Rapid development of innovative products for emerging markets University of Monterrey	Innovative products sounds like a misconception for companies -- if they don't move fast enough to create new capabilities and business models in a world enclosed by a pandemic, well, they're going to die.
Making the Case for Robotic Process Automation Association of International Certified Professional Accountants	Why the hell would an association of accountants be interested in publishing a course on how to justify an investment in Process Robotization? Take the course and find out!